SIC 2085 Distilled and Blended Liquors
SIC 2085
This category includes establishments primarily engaged in manufacturing alcoholic liquors by distillation and in manufacturing cordials and alcoholic cocktails by blending, processing, or mixing liquors and other ingredients. Establishments primarily engaged in manufacturing industrial alcohol are classified in SIC 2869: Industrial Organic Chemicals, Not Elsewhere Classified, and those bottling purchased liquors are classified in SIC 5182: Wine and Distilled Alcoholic Beverages.
312140
Distilleries
According to the Distilled Spirits Council, this industry was valued at approximately $95 billion each year. In 2004, American consumption of distilled spirits totaled 164 million cases. This was an increase of 3.1 percent from 2003, marking the seventh consecutive year of gains for the distilled spirit industry. Adult beverages were driven by desirable high-end premium products and consumers' growing thirst for fruit-infused vodkas, rums, and other flavored alcoholic beverages. These flavored beverages, combined with mixability, were key factors in the spirit industry's growth.
Whiskey was the nation's overall best seller in 2003, followed by vodka, cordials, rum, brandy, tequila, and gin. The top brands in the country were Bacardi rum, Smirnoff vodka, Absolut vodka, Captain Morgan rum, and Jack Daniel's whiskey. Other top sellers were Crown Royal whiskey, Jose Cuervo tequila, Jim Beam whiskey, and Seagram's gin.
All of the major liquor companies watched the international arena, especially the Asian market. Japan already was at the top of the U.S. export list and had been a favorite home for American whiskey. Latin America also was noted for its tremendous growth opportunity, especially for premium-priced products. In 2005 industry players were expecting gains of $655 million in exports.
A few large companies that offer a variety of alcoholic beverages dominated the distilled spirits industry. Most started with a flagship brand, such as Jim Beam Bourbon, and diversified into a family of products that included whiskey and non-whiskey items, such as gin, vodka, rum, tequila, cordials, mixed cocktails, and even fruit juices and other nonalcoholic or low-alcohol beverages. Many, such as Seagram's, Diageo, and Allied Domecq, were subsidiaries of large multinational conglomerates with diverse portfolios.
This category includes only those companies that produce distilled spirits. All distillers have to sell their products through wholesalers and retailers in order to accommodate various federal, state, and local regulations regarding the sale of alcoholic beverages. The Federal Alcohol Administration Act (FAA) was established at the end of the 13-year Prohibition Era in 1933. The FAA, which is enforced by the Bureau of Alcohol, Tobacco, and Firearms (ATF), qualifies distillers, collects producer and wholesaler occupational taxes, and regulates trade practices, advertising, and labeling. Beyond the uniformity of the FAA, regulations vary greatly among the 50 states.
States can sell distilled spirits either with an "open," licensed method or in a controlled environment. Open states have licensed retailers and wholesalers that handle the distribution and sale of alcoholic beverages. Thirty-two states and the District of Columbia use the open method. The other 18 states operate under the control method, in which each state government buys and sells alcoholic beverages at the wholesale and retail levels.
In addition to federal regulations, some states have set up their own independent agencies that are responsible for the administration, licensing, and enforcement of state laws and the collection of state revenues. Some state legislatures have created their own Alcoholic Beverage Control (ABC) agencies with rule-making power, and 32 states allow their citizens to vote for or against the sale of liquor on a city or county-wide basis.
All forms of alcoholic beverages—beer, wine, and liquor—are based on fermentation, the natural process of decomposition of organic materials containing carbohydrates. Liquor production involves the extra step of distillation, which reduces the original water content and greatly increases the alcoholic strength. Whereas beer averages 2 to 8 percent alcohol content, and wine averages from 8 to 14 percent, distilled spirits range from 35 to 50 percent alcohol. Two types of raw materials are used to make a distilled spirit: sugar and carbohydrates. Sugary materials include grapes, sugarcane, agave, molasses, and sugar. Materials with high levels of carbohydrates are corn, rye, rice, barley, wheat, and potatoes.
Civilizations in almost every part of the world developed some type of alcoholic beverage. The Chinese distilled a beer from rice before 800 B.C. The Arabs developed a method used to produce a distilled beverage. A reference to distillation appears in the writings of the Greek philosopher Aristotle, and the Romans produced distilled beverages, although no written references have been found prior to 100 A.D. Liquor production was reported in Britain before the Roman conquest. However, production of distilled spirits in Western Europe was limited until the eighth century, after contact with the Arabs.
Distilled spirits can be classified into two categories: brown goods and white goods. Brown goods include all whiskies, bourbons, and scotches. White goods include vodka, gin, rum, and tequila. Other major segments in the distilled spirits market are the cordial or liquor category and the assortment of ready-to-drink cocktails.
Whiskey is an all-encompassing term for any distilled liquor made from a fermented mash of grain. Although all whiskey is distilled in a similar manner, each can taste quite different. The four primary steps to make whiskey are mashing, fermenting, distilling, and aging. The grains of corn, barley, rye, and/or wheat are ground into a fine meal, mixed with water, and cooked until the starches have been converted into sugars. This process creates a "mash" that is mixed with yeast, converting the sugars into alcohol. The fermented mixture is then pumped into a still where steam condensation allows the alcohol to separate from the water and byproducts. Fresh from the still, the whiskey is colorless, harsh, and in need of aging. The aging process enhances the spirit and refines the whiskey, giving it an amber color.
Federal regulations specify that whiskey must be "produced at less than 190 proof and bottled at not less than 80 proof." American-distilled whiskeys include Tennessee, rye, and blended. Tennessee whiskey, such as Jack Daniel's and George Dickel, is a distinct product due to the filtering of the whiskey through charcoal prior to aging. Rye whiskey is made from at least 51 percent rye and distilled at no more than 160 proof. The whiskey then is stored at no more than 125 proof in new oak barrels. Blended whiskey, such as Seagram's Seven Crown, comes from at least 20 percent straight whiskey mixed with other whiskey grain neutral spirits. Blended whiskey became popular during World War II when whiskey was in short supply and distillers stretched its availability by adding grain neutral spirits.
Scotland remains the international leader in high-quality whiskey making. Blessed with natural resources and the ideal climate for making whiskey, Scotland boasts a long and rich history of distillation and a devotion to creating distinctly individual malts. By law, all scotch whiskey must be aged at least three years, although few brands enter the United States without being aged at least four. Scotch can be bottled in the country of origin or it can be shipped in bulk to the United States for bottling, which can be more cost effective.
More than 95 percent of scotch consumed worldwide is blended whiskey. Blends are the result of mixing both single malts and grain whiskies and are created to "soften" the harsher characteristics of individual malt whiskies. Although they are still a small percentage of the overall scotch consumption in the United States, single-malt whiskies have been made by Scottish distillers for more than 500 years. Single malts, the...
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